Top Ten 10 Myths

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Top Ten Reverse mortgage myths

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Beck Group Your Internet Reverse Educators To have an educator contact you to review your personal information, click the ‘Ask a Professional’ button on the home page

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Myth Number 1» “ If I take out a reverse mortgage the lender will own my home.” FALSE! Homeowners still retain title and ownership to their homes during the life of the loan, and can choose to sell the home at any time. As long as the borrower continues to live in and maintains home and property taxes and homeowners insurance are paid, the loan cannot be called due. Top Ten Reverse Mortgage Myths

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Myth Number 2» “ There are restrictions on how Reverse mortgage proceeds may be used.” FALSE. There are no restrictions. The cash proceeds from the reverse mortgage can be used for virtually any purpose and borrowers should be cautious of lenders attempting to cross sell other products. Many seniors have used reverse mortgages to pay off debt, help their kids, make ends meet or to have a financial reserve. Top Ten Reverse Mortgage Myths

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Top Ten Reverse Mortgage Myths Myth Number 3» “I cannot get a Reverse mortgage if I have an existing mortgage.” FACT: With enough equity in your home, you would pay off any existing mortgage so that your reverse mortgage is in first lien position. This is one of the most common reasons most homeowners take out a reverse mortgage.

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Myth Number 4» “ Only low-income seniors get Reverse mortgages.” False. Although some homeowners may have a greater need than others for the monthly proceeds or lump sum funds reverse mortgages offer, most simply prefer to be free of monthly mortgage payments. Without monthly mortgage payments, many homeowners find they can maintain their existing quality of life and build their savings to help with future expenses. Top Ten Reverse Mortgage Myths

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Top Ten Reverse Mortgage Myths Myth Number 5» “If I outlive my life expectancy, the lender will evict me.” False. Reverse mortgage lenders put no time limit on how long seniors can stay in their homes. Since homeowners still own the property, lenders cannot evict them, provided they follow the program guidelines. (Continue to live in and maintain the home, pay property taxes and homeowners’ insurance, and the loan cannot be called due).

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Top Ten Reverse Mortgage Myths Myth Number 6 » “ Reverse mortgage lenders pressure seniors to buy additional financial products.” FACT! This is not the case for all reverse mortgage lenders. However, Guaranteed Rate only offers mortgage products allowing this to be our main focus.

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Top Ten Reverse Mortgage Myths Myth Number 7» “ There are no objective advisors available to help Seniors.” FALSE. Borrowers are required to work with independent, third party counselors approved by the U.S. Department of Housing and Urban Development (HUD) in their local communities. This educational session helps them make the right decision for their unique situations.

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Top Ten Reverse Mortgage Myths Myth Number 8» “ My children will be responsible for the repayment of the loan.” False . If the borrower or their estate wants to retain the property, the balance must be paid in full. However, as long as the borrower or their estate sells the property to pay off the debt, there is no recourse if the HECM loan balance exceeds the home’s value at maturity. Any equity remaining in the property after the reverse mortgage is retired belongs to the borrower or their estate.

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Top Ten Reverse Mortgage Myths Myth Number 9» “ Reverse mortgage lenders take advantage of seniors.” False . Seniors who have been victims of reverse mortgage lending schemes are extreme exceptions and typically victims of unsavory lenders. As a consumer, you should only work with lenders who are Better Business Bureau and National Reverse Mortgage Lenders Association (NRMLA) members and adhere to those organizations’ strict Code of Ethics and Standards for Trust .

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Top Ten Reverse Mortgage Myths Myth Number 10» “ My Social Security and Medicare will be affected.” Fact. A reverse mortgage generally does not affect your Federal Social Security or Medicare benefits. However, if you are on Medicaid, funds that you retain would count as an asset and could impact Medicaid eligibility. To be sure, we recommend that you consult your federal and state benefits’ administrators or financial advisors.

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